Market Pulse with Dan Sheehan

Good Morning Investors

Markets opened lower this morning as the long-awaited "Liberation Day" arrives. President Trump is scheduled to announce sweeping new reciprocal tariffs this afternoon from the White House Rose Garden. While the details remain under wraps, we know the tariffs will be effective immediately, and there's chatter of across-the-board 20% levies on most imports. That alone has markets on edge.

S&P 500 futures were off 0.6% heading into the open, while the Nasdaq-100 shed 0.8% and Dow futures dropped by 216 points, or 0.4%. The market’s mood remains fragile after a choppy first quarter, and volatility is unlikely to fade until tariff details are finalised. The VIX is hovering near 22, suggesting elevated anxiety but still shy of crisis territory. Gold is holding firm after four straight sessions of all-time highs, signalling that investors are leaning heavily on traditional safe havens.

Let’s start with the obvious—trade policy is the dominant theme. President Trump’s tariff rollout is likely to be more than a one-day event. What we get today may only be the “cap” level, as Treasury Secretary Scott Bessent told lawmakers yesterday. That would mean countries can still negotiate down their tariff exposure. Still, reports from Bloomberg and The Washington Post suggest Trump is leaning toward a blanket 20% tariff, and that advisors are split between a tiered country-by-country model and a uniform rate.

If that’s the direction taken, we could see significant disruption across global trade, shipping logistics, and consumer prices. Early commentary from ocean freight executives has already flagged concerns of bottlenecks, margin compression, and cascading cost pass-throughs. Companies with heavy exposure to imported goods—retail, electronics, auto—are likely to feel the pinch first.

And while markets are rightly focused on tariffs, the mortgage data this morning is another signal of fragility in the system. Mortgage applications fell 1.6% last week, with refinance activity down 6%. Purchase applications did rise 2%—a rare bright spot—but the overall volume remains well below pre-pandemic levels. Rates held steady at 6.70%, but it’s the persistent uncertainty and affordability pressures that are keeping many potential buyers on the sidelines. Inventories are slowly building, which is helpful, but the demand-side story still lacks conviction.

Tesla reports Q1 deliveries today, and expectations are wide-ranging. The average call is for a 3.7% year-over-year drop, but some analysts are expecting a double-digit fall. China deliveries were down over 11% in March despite a strong sequential gain, and sentiment around Elon Musk continues to be a wildcard. Shares are down over 2% premarket.

Boeing CEO Kelly Ortberg will testify before the Senate today, addressing the company’s safety lapses and cultural overhaul. He’s expected to acknowledge “serious missteps” and outline how Boeing is attempting to restore trust. Given how much institutional confidence the brand has lost, this testimony could be pivotal.

Visa is reportedly offering $100 million to take over the Apple Card from Mastercard, while Amex is also in the mix. This shift underscores how valuable long-term payment partnerships are becoming as banks jostle for embedded finance relevance.

Elsewhere, General Motors and Lithium Americas finalized investment decisions on the Thacker Pass lithium mine in Nevada. It’s a big step in securing domestic EV supply chains as geopolitics make offshore sourcing more fraught.

And in retail, Walmart is reportedly pushing Chinese suppliers to cut prices to offset tariff costs. This could set off a broader trend of margin squeezing across global supply networks.

I continue to view the current market drawdown as a correction—not a bear market for the S&P 500. That said, if today’s tariff details are worse than expected, we could see the Nasdaq test bear territory in the near term. The environment is noisy, sentiment is stretched, and technicals remain weak, with all major indices still sitting below their 50- and 200-day moving averages.

But I do think a more constructive setup is forming for the second half of the year. The prospect of tax cuts remains very real, and I still believe tariffs will be partially rolled back by Q3—especially if the economic impact becomes politically costly. Investors should be preparing watchlists, revisiting companies they wanted to own six months ago, and planning for re-entry. Timing the bottom is always difficult, but owning quality businesses into weakness is rarely the wrong long-term approach.

From a sector lens, I’m watching energy very closely. Technically, the charts are showing signs of a breakout after a multi-year holding pattern. With commodity prices firm and renewed attention on domestic production, energy could become a leadership group in Q2.

Today’s key economic data includes the ADP private payrolls report for March, expected to show 115,000 jobs added—a modest rebound from February’s 77,000 print. We also get durable goods and factory orders data, both important gauges of business investment health. With the official non-farm payrolls report due Friday, this morning’s releases will offer an early read on whether labour market momentum is holding up amid rising macro pressure.

Mortgage data also adds a wrinkle to the picture. While purchase activity rose, refinance volumes have dropped sharply—down 6% week-over-week—and demand remains tepid. The average 30-year fixed rate sits at 6.70%, and consumers remain wary about locking into long-term commitments while economic signals remain mixed.

I expect volatility today and tomorrow around the tariff news, and I see that continuing through April—especially if the imposed rates are broader or higher than currently priced in. But I also see a path to recovery in the second half of the year. Tariff pressure may ease by Q3, and tax cuts remain a likely catalyst as we move closer to the election cycle.

This isn’t a time to be complacent, but it’s also not a time to panic. Use the volatility to your advantage. Markets may still grind lower in the short term, but if you're disciplined and selective, there's upside ahead.

Please feel free to reach out to me on LinkedIn or by email if you would like help navigating this market environment or have any planning-related questions.

Dan Sheehan

[email protected]

This newsletter is for informational purposes only and should not be considered as investment advice. Please consult with your financial advisor about your specific situation.